Blizzard won't be the only one potentially making a profit on Diablo III. Anyone who plays the dark fantasy hack and slash game could, thanks to its Auction House, a new in-game service that allows players to buy and sell loot not just for virtual gold, but for cold, hard cash.

That's just one of the many changes coming to the next Diablo and an updated Battle.net, the service that powers Blizzard's multiplayer.

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The other substantial, but perhaps not unexpected, game changer is the requirement that all Diablo III players be online to play Blizzard's next game, even if they plan on slaying demons solo. Blizzard says it's implementing the internet connection requirement to combat cheating and improve the overall multiplayer experience—plus keep its new, player-run economy stable. That may prove a controversial stipulation, not being able to play a game of Diablo without an internet connection, but it's the new Auction House, the eBay-like market that enables players to exchange virtual goods for in-game gold or real money that is perhaps Blizzard's most surprising change.

Blizzard Entertainment invited a group of game journalists and Diablo enthusiast fan sites to its Irvine, CA headquarters last week to show off the beta version of Diablo III and discuss the improvements coming to its multiplayer Battle.net platform. Blizzard's Rob Pardo, executive vice president of game design and Diablo II designer, explained to the group why the developer is implementing those changes.

Pardo talked about Battle.net's "areas for improvement" specifically related to the Diablo experience. This included Diablo II gameplay annoyances like single player characters having divided access to the game's multiplayer mode; a lack of persistence in online characters, which can also expire if not regularly played; and the inefficiency of finding, meeting and making friends online. Cheating, player-killing and a makeshift player-developed economy (built on the trading of rare Stones of Jordan from Diablo II) were also signs to Blizzard that it needed to rethink how Battle.net worked with its action RPG.

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With Diablo III, Blizzard says it will update Battle.net with new features that change the way Diablo fans play with each other. That includes improved matchmaking, the ability to see and speak with your friends connected to other Blizzard games (StarCraft II, World of Warcraft) and dynamic cooperative play.

Diablo III players will always be connected to their friends through Battle.net, Blizzard says, with a persistent friends list, cross-game chat and the ability to join up with other players online at any time. That means that to play Diablo III, players will be required to have a constant internet connection, even if they're facing Diablo and his demonic siblings alone. Unlike Blizzard's StarCraft II: Wings of Liberty, players cannot play the game's campaign offline.

Blizzard says the always-on internet connection also helps prevent cheating, item duplication and character hacking, the greater annoyances that would interfere with (or completely ruin) the Diablo III Auction House.

Pardo said Blizzard built the Auction House to facilitate improved item trading between players, to give them a safe environment in which to exchange, search for, buy and sell their gear. It is not, according to the developer, a Blizzard store designed to sell directly to players.

Built into the game's client, the Diablo III Auction House will let players swap items—weapons, gems, armor, runestones, even characters—for other items, in-game gold or regional, real-world currency. Buyers can search by character class and item type, with the option to auto-bid on or instant buy virtual goods. Transactions between players are handled anonymously.

On cash-based transactions, Blizzard will charge sellers both a listing fee and a "nominal fixed transaction fee" if the item finds a buyer. The developer says the listing fee was designed to prevent players from putting up every item they own up for sale. It plans to offer an unspecified amount of free listings to Diablo III players who might want to experiment with selling their game loot.

Diablo III players who opt to sell in-game gear for real world currency have the option of funneling the cash proceeds into one of two accounts: an e-balance that players can use to buy other Blizzard products (games, World of Warcraft game time, virtual pets) and an unannounced third party payment provider that will simply let them cash out their winnings (minus another fee from the third party).

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Those playing in the game's still-unspecified "Hardcore" difficulty, which has in the past meant player deaths are permanent, are restricted from using the Auction House.

So, why is Blizzard adopting a player-led economy that introduces the tangle of real-world money? Blizzard says its great for both buyers and sellers, that it works well with the design of the Diablo item system of randomized loot drops and it adds depth to the long term game. It also helps monetize the game, naturally, which has enjoyed subscription-free multiplayer for the past decade.

"If Blizzard doesn't do this, I'm not so naive to think that it's not going to happen," Pardo said. In the past, he said, Blizzard has tried to stamp out gray and black market sales of in-game items are bought and sold with real-world money. The Auction House is something players want, Pardo said, now it has Blizzard's official blessing.